Essay about Hansson Private Label, Inc Case Analysis

1520 WordsOct 26th, 20117 Pages

Overview of the Industry

As a manufacture of private label personal care products, Hansson Private Label, Inc. has a considerable amount (28%) of market share in its specific industry. However, private labels as a whole constitute less than 19% in the entire personal care industry. Therefore, growth of HPL depends on the growth of the industry and more importantly the growth of private label component within the industry. In terms of the personal care industry, market growth will not improve significantly in the future. As proven in the past four years, unit volumes in the industry increases less than 1% in each year and the dollar sales growth was only driven by modest price increases. Therefore, the opportunity for private labels…show more content…

As seen in exhibit 2 as well, the company’s unit share and dollar share steadily increased minimally from 2005 to 2007. Unit share increased from 21% to 21.3%, while dollar share increased from 15.7% to 16.1%. Similarly, US sales increased in HPL’s Target Markets for skin care, oral hygiene, personal hygiene, and hand and body care from 2003 to 2007, making the package more appealing to the company. With HPL’s sales into its retail channels increasing from 2003 to 2007, in addition to the increase in sales, label shares, and such aspects as revenue, it is evident that the company’s financial performance for the past few years has been favorable.

Need for Expansion

HPL benefits from the private labels as a whole gaining competitive advantages over brand names. Its more pertinent competition, however, will come from its private label peers. A 28% market share among comparable companies has not yet made HPL a private label personal care industry leader. The opportunity of locking in a strong relationship with a large retailer will provide HPL the opportunity to significantly increase its market shares and also the possibility of becoming the industry leader.
The expansion plan calls for a $50 million investment in production capacity to accommodate the future demand of the retailer. Considering that all of HPL’s four plants are already operating at

Case Study: Hansson Private Label, Inc.
Executive Summary
The owner of Hansson Private Label (HPL) must determine whether or not to accept an aggressive expansion project that would preclude the company from pursuing any alternative investment opportunities for several years. The investment, if successful, would offer numerous benefits to the company, capturing greater market share, strengthening relationships with major customers, crowding out competition and increasing firm value. Nonetheless…

industry within which Hansson Private Label exists is a very competitive and volatile one. It is dominated by two types of firms, namely, Branded and Private Labels. Tucker Hansson operates as a private label firm. Private Label firms are an emerging market which is competitive based on its ability to have a lower price than its rivals. This market has experienced growth primarily because of this affordability. However this growth would be regarded as organic.
Based on analysis of the financials…

in expansion and providing a recommendation to Hansson Private Label, Inc.
Tucker Hansson, the owner of Hansson Private Label, is struggling in whether to execute the $50 million investment proposed by his manufacturing team. Under this situation, the subject of this report is to evaluate the potential investment of expanding production capacity at Hansson Private Label (HBL) and make a recommendation to Tucker Hansson. In this report, I will specifically focus on…

Hasson Private Label Case
1. Hansson Private Label already has a 28% share of the private label personal care products. So they are a pretty big player in the industry.
2. In 2008 the FCF will be -57817 followed by -12378 in 2009. Then in 2010 the FCF will finally be positive at 5939. The free cash flow will slowly increase so that in 2018 the free cash flow will be 12783. The free cash flows for all the years will be included in a table in the appendix. We think that his projections…

Abstract
This project is to identify and analyze HPL (Hansson Private Label ) company’s new investment decisions based on a series of calculations include: Operating Cash Flows (OCF), Net Present Value (NPV), Internal Rate of Return (IRR), and Sensitivity Analysis. The analysis suggests that Hansson should be very cautious regarding the investment proposal that is developed by his manufacturing team. Although the projections and analysis of the project for the next 10 years proposed by Robert Gates…

4021
REV: MARCH 1, 2010
ERIK STAFFORD
JOEL L. HEILPRIN
JEFFREY DEVOLDER
Hansson Private Label, Inc.:
Evaluating an Investment in Expansion
Introduction
On a frigid Sunday night in late February 2008, Tucker Hansson pored over a proposal developed
by his firm’s manufacturing team. It called for investing $50 million to expand production capacity at
Hansson Private Label (Hansson or HPL). For Hansson, a private company, this would be a
significant investment. The company had not initiated…

In 2008, Dell Inc. had grown from a $1,000 startup called PC’s Limited to a company that had $ 61 million in revenues. ("Dell 's net revenue 1996-2013 | Statistic") Dell Inc., formally known as Dell Computer Corporation, was started and headed by Michael Dell until 2004 when he stepped down as CEO. Michael Dell went from being a college drop out to becoming the youngest ever CEO of a Fortune 500 company, not to mention becoming a multibillionaire in the process. ("Dell Inc. History") However, the…

A brief evaluation of Hanson Private Label (HPL) will reveal signs of an excellent, growing, and well run company. There are no danger signs within the financials of HPL. The following have seen growth with every passing year: revenue, current assets, owner’s equity, net working capital, and sales (even groceries). The following categories have grown every year with the exception of 2005, where a higher than usual COGS caused a dip in gross margin – 15% versus a historically high teen’s percentage:…

Private label products or services are typically those manufactured or provided by one company for offer under another company'sbrand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands, although recently some private label brands have been positioned as "premium" brands to compete with existing "name" brands.
Richelieu Foods, for example…